Cleaner gas rule would mean higher price at pump

WASHINGTON (AP) — The Obama administration's newest anti-pollution plan would ping American drivers where they wince the most: at the gas pump. That makes arguments weighing the cost against the health benefits politically potent.

The proposal to reduce sulfur in gasoline and tighten auto emission standards, released Friday, would raise gasoline prices by less than a penny per gallon, the Environmental Protection Agency says. But the oil industry points to its own study putting the cost between 6 and 9 cents a gallon.

The EPA also said its proposal would add about $130 to the price of new vehicles, beginning in 2025.

The administration says the costs to consumers are worth the payoff: billions of dollars in health benefits from reductions in smog- and soot-forming pollution.

The agency predicts $7 in health benefits for every dollar spent to implement the new rules. The agency must hold public hearings before finalizing the rules. It plans for them to take effect in 2017.

The proposal was praised by environmentalists and health advocates, as well as automakers who say it will help the U.S. catch up with the cleaner fuels used in other nations. California already uses the sulfur standard.

EPA Acting Administrator Bob Perciasepe said the proposal is designed to "protect the environment and public health in an affordable and practical way."

Opponents say gasoline prices are stubbornly high already and Americans shouldn't have to pay more. The oil industry, Republicans and some Democrats had urged the EPA to hold off on proposing the tighter regulations.

"With $4 a gallon gas the norm in many parts of the country, we cannot afford policies that knowingly raise gas prices," House Energy and Commerce Chairman Fred Upton said Friday. Instead, the Obama administration should work to increase energy supplies by approving the Keystone XL oil pipeline from Canada and other projects, said Upton, R-Mich.

Rep. Ed Whitfield, R-Ky., who is chairman of the energy and power subcommittee, called the sulfur rule "another example of an overzealous EPA" and said lawmakers would give it a hard look.

Environmentalists hailed the proposal as potentially the most significant in President Barack Obama's second term.

The so-called Tier 3 standards would reduce sulfur in gasoline by more than 60 percent and reduce nitrogen oxides by 80 percent. It would make it easier for states to comply with health-based standards for the main ingredient in smog and soot. And the regulation would allow automakers to sell the same vehicles in all 50 states.

The Obama administration already has moved to clean up motor vehicles by adopting rules that will double fuel efficiency and putting in place the first standards to reduce the pollution from cars and trucks blamed for global warming.

"Together, these standards represent the largest step in our nation's history toward reducing harmful emissions from the vehicles we drive every day," said Michelle Robinson, director of the clean vehicles program of the Union of Concerned Scientists, an environmental group for scientists.

Robinson said the rules would reduce asthma, respiratory problems and premature death.

"We know of no other air pollution control strategy that can achieve such substantial, cost-effective and immediate emission reductions," said Bill Becker, executive director of the National Association of Clean Air Agencies. Becker said the pollution reduction would be equal to taking 33 million cars off the road.

But the head of American Fuel and Petrochemical Manufacturers, Charles Drevna, questioned the motives behind the agency's regulation, since refining companies already have spent $10 billion to reduce sulfur by 90 percent. The additional cuts, while smaller, will cost just as much, Drevna said.

"I haven't seen an EPA rule on fuels that has come out since 1995 that hasn't said it would cost only a penny or two more," Drevna said.

A study commissioned by the American Petroleum Institute estimated that lowering the sulfur in gasoline would add 6 cents to 9 cents a gallon to refiners' manufacturing costs, an increase that likely would be passed on to consumers at the pump. The EPA estimate of less than 1 cent is also an additional manufacturing cost and likely to be passed on.

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